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FIRPTA

(Foreign Investment in Real Property Tax Act)

You may be asking “What is FIRPTA?” It’s not a tax, but a required withholding.

The U.S. imposes a 10-15% withholding tax on sales of U.S. real property by foreign sellers. Both the buyer and seller may have US tax obligations for the sale of real estate.

There are exemptions from FIRPTA withholding. We can help you through the entire withholding process and potentially arrange for a lesser amount of withholding. Note that the withholding is almost always vastly higher than the actual tax, so tax returns will need to be filed after year end in order to have the excess withholding refunded. We prepare these returns.

FIRPTA requires having a US Individual Tax Identification Number (ITIN). Duane Eckelberg is an IRS Acceptance Agent and can facilitate issuance of the ITIN.

FIRPTA can seem daunting. We are here to help – email or call us.